Adverse selection exists when those with higher risk obtain insurance coverage.

Name: Adverse selection exists when those with higher risk obtain insurance coverage.
Brand: Quizplus
Rating: 4.8 (55 reviews)

Question

Quizplus · Accepted Answer

Adverse selection refers to the tendency for those with the highest risk to be more likely to seek out and obtain insurance coverage. This can create problems for insurance companies, as they may end up paying out more in claims than they collect in premiums, leading to higher costs for all policyholders.

Adverse Selection Exists When Those with Higher Risk Obtain Insurance